The Chancellor Rishi Sunak has delivered his first Budget of 2020 in the House of Commons, announcing the government’s tax and spending plans for the year ahead, along with several measures to mitigate the impact of the Coronavirus.
Here is a summary of the main points:
Coronavirus response
- £5bn emergency response fund to support the NHS and other public services
- Statutory sick pay will be paid to all those who choose to self-isolate, even if they don’t have symptoms
- Contributory employment Support Allowance benefit claimants will be able to claim sick pay on day one, not after a week
- £500m hardship fund to help vulnerable people
- Firms with fewer than 250 staff will be refunded for sick pay payments for two weeks
- Small firms will be able to access “business interruption” loans of up to £1.2m
- Business rates will be abolished for firms in the retail, leisure and hospitality sectors with a rateable value below £51,000
Personal taxation and wages
- National Insurance Contributions tax threshold to rise from £8,632 to £9,500 – saving people just over £100 a year
- 0.5% VAT on women’s sanitary products, the tampon tax, to be scrapped
Alcohol, tobacco and fuel
- Fuel duty for be frozen for the 10th consecutive year
- Duties on spirits, beer, cider and wine to be frozen
- Business rate discounts for pubs to rise from £1,000 to £5,000 this year
Business, digital and science
- System business rates to be reviewed later this year
- Entrepreneurs’ Relief will be retained, but lifetime allowance will be reduced from £10m to £1m
- £5bn to get gigabit-capable broadband into the hardest to reach places
- Science Institute in Weybridge, Surrey to get a £1.4bn funding boost
- An extra £900m for research into nuclear fusion, space and electric vehicles.
The state of the economy
- Economy predicted to grow 1.1% this year, not taking into account the impact of coronavirus
- Annual output forecast to be 1.8% in 2021-22, 1.5% in 2022-23 and 1.3% in 2023-24
- Inflation forecast of 1.4% this year, increasing to 1.8% in 2021-2022
Environment and energy
- Plastic packaging tax to come into force from April 2022
- Manufacturers and importers whose products have less than 30% recyclable material will be charged £200 per tonne
- Fuel subsidies for off-road vehicles – known as red diesel – will be scrapped “for most sectors” in two years time
- Farmers and rail operators will be excluded
- £120m in emergency relief for communities affected by this winter’s flooding and £200m for flood resilience
- Total investment in flood defences to be doubled to £5.2bn over next five years
- £640m “nature for climate fund” to protect natural habitats, including 30,000 hectares of new trees
Transport, infrastructure and housing
- More than £600bn is set to be spent on roads, rail, broadband and housing by the middle of 2025
- Ministers say this represents the largest capital investment in infrastructure for generations
- £2.5bn will be made available to fix potholes and resurface roads over five years
The state of the public finances
- Public sector net borrowing set to rise this year to 2.1% of GDP, rising to 2.4% and 2.8% in subsequent years
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